Pittsburgh med center to call bonds rather than pay 'loan sharks'

[Celebration]

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080219/REG/962447735/1036

The University of Pittsburgh Medical Center plans to redeem $430 million of its bonds to stem as much as $500,000 a week in losses caused by a crisis roiling the market for so-called auction-rate securities.

The hospital offered to buy back $91 million of its debt yesterday, and will make similar offers for almost $340 million more, according to Tal Heppenstall, UPMC's treasurer. Holders have until March 19 to sell the bonds back for $100.01 of par value plus accrued interest, according to a notice posted on Bloomberg.

Funding costs soared nationwide in the $330 billion market for auction-rate securities as banks from Citigroup to Goldman Sachs stopped bidding for the debt at the periodic sales they organize. New York state, with $4 billion of auction debt, may convert the bonds to a fixed rate or a different type of variable-rate security, state budget director Laura Anglin said in an interview in Albany last week.

“It's outrageous,” Mr. Heppenstall said. “We're a AA-rated credit. We don't need to get financing from loan sharks.”

[Hydra]

1. The signs are popping up like mushrooms

I can't wait to see the deathtoll of this deliberate crisis.

:popcorn:

[A HERETIC I AM]

2. This is good. Lets hope we see a lot more of it.

I mentioned this sort of thing in a thread a week ago. I hope more of the issuers of ARS bonds call them in. Get out of that market.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=34400&mesg_id=34442

And for the sake of full disclosure, I also mentioned Auction Rate Securities as "An interesting alternative to Money Market funds" in this thread back in November in the Personal Finance and Investing forum. I should update that thread with new info. It had 151 views but no responses.